This result obtains of this formula:
Final capital = C0 x (1+Ti) ^t
In her, and for understand it better:
- CO: is the principal (the€10,000).
- You: is the Interest rate yearly (5% or 5/100).
- t: is the time that hard the investment (the 5 years).
If the apply to the example:
12,762 = 10,000 x (1 + 5/100) ^ 5